Category: The Chief Economist’s Note

I have been loath to wade into the debate around Brexit in these notes. That’s partly because it has become a sorry and depressing tale of abject political failure on pretty much every side in the UK. But it’s also because (so far at least) the UK economy appears to have shrugged off the latest … Continue reading “A very British farce”

Three pieces of data released last week brought hope that, having slowed for the best part of six months, the world economy may now be starting to stabilise. First came March’s Caixin manufacturing PMI for China, which rebounded to an eight-month high. Then, later in the week, industrial production data from Europe’s manufacturing powerhouse, Germany, … Continue reading “Springtime for the global economy?”

Unless you’ve locked yourself away in a dark room for the past week (and, for UK readers, that would be entirely understandable given the debacle over Brexit), then you’ll have heard plenty of discussion about how bond markets have become increasingly gloomy about the economic outlook. Specifically, yields on long-dated government bonds in the US … Continue reading “Bond markets flash red on the real economy”

A recent paper by Larry Summers and Lukasz Rachel has been doing the rounds among economists and has revived debate in financial markets about “secular stagnation”. But what is “secular stagnation”, and what might it mean for economic growth, monetary policy and asset prices? One problem is that there are competing definitions of secular stagnation. … Continue reading “Picking apart the threat from secular stagnation”

The continued weakness in key economic data, together with the recent abrupt change in tone by the European Central Bank, has prompted renewed questions about the health of the global economy. At times of heightened uncertainty, I think it’s useful to split any analysis into three parts: what we know, what we think we know … Continue reading “Taking stock of the health of the global economy”

Last week we held a series of conferences across Asia and Australia discussing the outlook for the global economy and financial markets. You can find recordings of all our presentations here. A recurring question from clients, perhaps unsurprisingly, centred on the outlook for China and the implications for economies elsewhere in the region. China receives … Continue reading “Why the consensus on Asia is wrong – and why it matters for the rest of the world”

We seem to be moving towards an agreement between the US and China on trade. What would this mean for the global economy? The finer points of the deal are still unclear, but it is likely to involve Beijing agreeing to increase its imports from the US in several areas (soy, oil, natural gas, wheat, … Continue reading “The dangers of over-interpreting a US-China trade deal”

What’s behind the slowdown in the global economy in recent months? It’s a question we’re often asked by clients – and one to which there is no simple answer. Part of the problem is that it’s often difficult to isolate the causes of economic downturns (and, for that matter, upturns) in real time. It’s also … Continue reading “What explains the global slowdown?”

Do policymakers have sufficient ammunition to fight the next economic downturn? It’s a question that’s vexing economists – and at first sight the answer appears to be “no”. After all, on the fiscal side, public debt ratios in most developed economies are still well above their pre-2008 levels and in some cases (notably the US) … Continue reading “Policymakers still have ammunition – but will they use it?”

Will the recent weakness in a broad swathe of economic data be a flash in the pan or does it herald the start of a new global downturn? The answer is likely to depend in part on what happens to financial conditions. Financial conditions is a somewhat esoteric term to describe how the prices of … Continue reading “If you only watch one chart, make sure it’s this one”